Ann-Marie Coleman

Enforcement report confirms ASIC’s focus for remainder of 2017

By Ann-Marie Coleman / 23 August 2017 19 June 2019 / General, Industry

On 22 August 2017, ASIC released a report regarding its enforcement outcomes from the first half of 2017. The report also flags what the focus of ASIC’s enforcement activity will be over the next six months (1 July to 31 December 2017). Consumer credit continues to be a key focus for ASIC, as do obligations of Australian financial services (AFS) licensees. In the first half of 2017 the majority (59%) of ASIC enforcement in relation to financial services related to credit and 8% of ASIC’s enforcement relating to financial services was connected with dishonest conduct and misleading statements. For the …

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CCI sales process to be overhauled

By Ann-Marie Coleman / 4 August 2017 19 June 2019 / General, Industry, Regulatory

ASIC has recently announced the establishment of a Consumer Credit Insurance (CCI) Working Group, who have been tasked with improving outcomes for CCI customers. The CCI Working Group will progress a range of reforms. A key reform will be the introduction of a deferred-sales model for CCI sold with credit cards over the phone and in branches. This means that banks will be prohibited from selling a CCI policy until at least four days after the customer has applied for their credit card. The intention of this reform is to reduce the risk that the customer will feel pressured to …

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Breach reporting obligation repealed for group purchasing bodies

By Ann-Marie Coleman / 14 July 2017 19 June 2019 / General, Regulatory

Group purchasing bodies (GPBs) are no longer required to report breaches of the conditions of relief provided by ASIC Class Order 08/1 (Class Order). The obligation to comply with the breach reporting condition in the Class Order was due to commence from 30 June 2017 but has been repealed. GPBs are persons who arrange or hold cover under risk management products for others but neither issue risk management products (except for interests in a risk management scheme) nor provide any financial product advice (except as a result of providing certain general information). The Class Order provides conditional relief to a …

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Call for extension of conflicted remuneration ban

By Ann-Marie Coleman / 12 July 2017 19 June 2019 / Industry, Regulatory

The ban on conflicted remuneration should extend to the general insurance industry and to all life policies, regardless of whether the policy was obtained through the superannuation system or not, according to Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST). In May this year the Government sought stakeholder submissions on the five measures enacted in 2013 as part of the Future of Finance Advice (FoFA) reforms. One of these reforms was the ban on conflicted remuneration, including up-front and tailing commissions and like payments, for both individual and group risk insurance within superannuation. This reform sought to …

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ASIC industry funding model introduced

By Ann-Marie Coleman / 21 June 2017 19 June 2019 / General, Regulatory

Late last year the Government announced it would introduce an industry funding model for ASIC (our previous update on this can be found here). The ASIC Supervisory Cost Recovery Levy Bill 2017 and related bills have now passed. Effective from 1 July 2017, ASIC’s regulatory costs will be recovered through annual levies from all industry sectors regulated by ASIC. The amount of the levy will be worked out in accordance with regulations. Whilst the relevant regulations have not yet been passed, the draft regulations apply either a flat or a graduated levy to entities in each industry subsector regulated by …

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ASIC sets commission caps and clawback amounts for life insurance

By Ann-Marie Coleman / 7 June 2017 19 June 2019 / Industry, Regulatory

In February this year the Corporations Amendment (Life Insurance Remuneration Arrangements) Act 2017 (the Act) was passed by Parliament, followed by the associated regulations. Our updates on these can be found here and here. The Act removed the exemption from the ban on conflicted remuneration for commissions paid in relation to certain life insurance products. The Act also enabled the Australian Securities and Investments Commission (ASIC) to allow commissions to be paid if requirements around commission caps (benefit ratio requirements) and clawbacks are met. ASIC has now made ASIC Corporations (Life Insurance Commissions) Instrument 2017/510 (ASIC Instrument) which allows commissions …

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Insurance Flashlight

Ann-Marie Coleman